Which of the Following Statements Is MOST Correct

question 18

Multiple Choice

Which of the following statements is MOST correct?

• A) If a project's internal rate of return (IRR) exceeds the required return, then the project's net present value (NPV) must be negative.
• B) If Project A has a higher IRR than Project B, then Project A must also have a higher NPV.
• C) The IRR calculation implicitly assumes that all cash flows are reinvested at a rate of return equal to the IRR.
• D) A project with a NPV = 0 is not acceptable.

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Definitions:

Terman

Lewis Terman, an American psychologist best known for his work in intelligence testing and the study of giftedness.

Gifted Kids

Children who exhibit a high level of capability in intellectual, creative, artistic, or leadership areas in comparison to their peers.

Several Decades

A period of many years, often used to describe a long time frame in history or a person’s life.

Grey Matter

Brain tissue that contains most of the brain's neuronal cell bodies and is involved in muscle control, sensory perception, and decision making.